Income tax is a tax levied by the government on the income of individuals, businesses or other entities within its jurisdiction. It is usually calculated as a percentage of income earned by an individual or organization over a specific period of time such as a year. The purpose of income tax is to generate revenue for the government to finance public services, infrastructure and various programs.

The amount of income tax owed by an individual or entity is determined by their taxable income, which is the portion of their total income that is subject to taxation after taking into account allowable deductions, exemptions and credits. Taxable income includes various sources of earning, such as salaries, wages, business profits, rental income, dividends and interest.

Income tax rates may vary depending on the jurisdiction, the type and amount of income, and the tax bracket of the individual or entity. Some tax systems use progressive rates, meaning that individuals with higher incomes pay a higher percentage of their income in taxes, while others use flat rates where everyone pays the same percentage regardless of income. .

Income tax is an important source of revenue for governments and is used to finance public services such as education, health care, defence, infrastructure and social welfare programmes. It is important for individuals and businesses to accurately report their income and comply with tax laws to ensure proper tax payments and avoid penalties or legal issues.

If you want to file your Income Tax Return with us, List of documents & details require listed below :

• Pan Card

• Aadhaar Card With Mobile Number Link Is Mandatory

• Bank Account Details

• E- Mail Id & Mobile Number

• For Salary Income Form 16 Or Any Other Income

• Section 80 Deductions Investment Details

• Income From Capital Gain, Capital Gain Report In Excel Format Is Require

• Business Income Profit & Loss A/C, Balance Sheet, Capital A/C (If You Don’t Have We Prepare It)

What is Financial Year (F.Y.) & Assessment Year (A.Y.) ?

A financial year and an assessment year are terms used in the context of income taxation in many countries, including India. These terms are often used to determine when you need to file your income tax returns and for which period you are reporting your income. Here’s what each term means:

As you know, a calendar year is from January to December. 

For Income Tax purposes, the financial year concept is taken into consideration.

A Financial Year is from 1st April to 31st March. For example, the financial year 2023-24 means it is from 01 April 2023 to 31 March 2024.

Any income earned during a financial year is taxed in to the next financial year. So, the financial year in which the tax is assessed or calculated as called the Assessment Year.

For example, any income earned during the financial year 2023-24 will be taxed in the financial year 2024-25. So, 2024-25 is the Assessment Year.

During the assessment year, taxpayers file their income tax returns for the income earned and expenses incurred in the previous financial year.

Here’s a simplified example to illustrate the concept:

• Financial Year (FY) 2023-2024: This is the year in which you earn income, make investments, and incur expenses.

• Assessment Year (AY) 2024-2025: This is the year in which you evaluate and report your income for the financial year 2023-2024 and file your income tax return.

It’s important to keep track of these terms, especially when filing your income tax returns, as they help determine the income that needs to be reported and the applicable tax rates and deductions for that particular financial year.

Salary & Pension

Salaried/Individual taxpayers to file ITR-1 & ITR-2. Those have to file ITR needs to link their PAN & Aadhaar. Also a valid mobile number needs to be linked with Aadhaar.

For More details Click Here.

Professional & Small Businesses

Professional & Small Business individuals tax payers to file ITR-3 & ITR-4. Those have to file ITR needs to link their PAN & Aadhaar. Also a valid mobile number needs to be linked with Aadhaar.

For More Details Click Here.

Tax Slabs for AY 2023-24

Individuals and HUFs can opt for the Old Tax Regime or the New Tax Regime with lower rate of taxation (u/s 115 BAC of the Income Tax Act)

The taxpayer opting for concessional rates in the New Tax Regime will not be allowed certain Exemptions and Deductions (like 80C, 80D, 80TTB, HRA) available in the Old Tax Regime. However, the deductions under section 80CCD(2), 80CCH(2) and 80JJAA shall be available in the New Tax Regime.

New  Tax Regimes :-

New Tax regime has been effective since April, 2020.

It is asimplified tax regime and hence it has 

• Only 1 tax slab for all the age groups. It has reduced tax rates as compared to the Old tax regime

• Most of the exemptions and deductions available in the old tax regime and not allowed here. Only a very few exemptions and deductions are allowed.

Old Tax Regime :- 

This is the tax regime that has been in use even before the New tax regime was introduced. This will still be available and you can choose to follow the way you used it in the past.

It has 3 different tax slabs for 3 different age groups. It provides a lot of Exemptions and Deductions that you can make use of to reduce the amount of income tax you pay to the Government.

Which Tax Regime to Choose ?

So, which tax regime should you choose? Old or New ?

There is no fixed answer to this question. It varies from one person to another person.

You can work out your income tax amount using both regimes and then choose the one that is best for your situation.

Every financial Year, you can switch between old & new tax regimes. Even if you choose new tax regime this financial year, you can switch back to old tax regime in the next financial year and vice versa.

But, There is One Condition.

You can switch between Old & New tax regimes if you don’t have any kind of business income. If you have any kind of business income, then you can switch back to Old tax regime only once. After that, you can’t move to the New tax regime until your business income becomes zero.

• Salaried individuals below the age of 60 will have to follow the given tax rates, effective April 1, 2023, if they opt for the revised New Tax Regime.  

Additionally, you will also be levied an additional 4% Health and Education cess.

Income Tax Slabs for Salaried Person and HUF for FY 2023-24 – Old Tax Regime

The Old Tax Regime for FY 2023-24 for salaried individuals and HUF below 60 years of age is as follows:

Income Tax Slabs & Rates for Senior Citizens in F.Y. 2023-24 (A.Y. 2024-25)

Tax payers aged between 60 years to 80 Years of age are considered as Senior Citizens as per the Income Tax Act, 1961 and get a higher exemption limit under the old tax regime than taxpayers aged less than 60 years. However, this benefit is not available under the New Tax Regime for F.Y.2023-24. Let’s compare the income tax slabs and rates for senior citizen as per the Old Tax Regime and New Tax Regime for F.Y.2023-24.

Income Tax Slabs & Rates for Super Senior Citizens in F.Y. 2023-24 (A.Y. 2024-25)

Tax payers aged 80 Years and above age  are considered as Super Senior Citizens as per the Income Tax Act, 1961 and they get a higher exemption limit of Rs.5 Lacs under the Old Tax Regime. This benefit is however not applicable to super senior citizens opting for the New Tax Regime slabs in F.Y. 2023-24. Super senior citizens will be required to pay taxes as per the income tax slab F.Y. 2023-24 under the Old Tax Regime and New Tax Regime as per below table.

Deductions Summary

Section 80 Deduction Table (Old Tax Regime)